Lack of Medicaid expansion could be costly

RALEIGH — The decision by Gov. Pat McCrory and Republican lawmakers not to expand Medicaid coverage through the Affordable Care Act will cost North Carolina $51 billion in lost federal money and thousands of jobs over the next decade, according to a new report.

The study issued by the non-partisan Robert Wood Johnson Foundation and the Urban Institute says the state will lose nearly $40 billion in Medicaid funding and more than $11 billion in reimbursements to North Carolina hospitals if the state continues to forgo expansion through 2022.

It's estimated about 319,000 low-income workers would have gained health insurance coverage had the state expanded Medicaid.

McCrory has repeatedly said the state's Medicaid system, which he has overseen since taking office at the beginning of 2013, is too bloated and broken to expand. Republican legislative leaders have said reforming the system was among their top legislative priorities for 2014, but appear poised to adjourn for the year without approving a plan.

McCrory's office didn't respond Monday to a request for comment.

Sen. Ralph Hise, a key budget writer on Medicaid issues, said he's seen at least two other studies contradicting the latest report. GOP legislators are being cautious by choosing not to expand Medicaid, said Hise, R-Mitchell.

An expansion would lead thousands of families now covered by private insurance to switch to subsidized Medicaid coverage, Hise said. There is no guarantee that the federal government will stick to its promise to pay at least 90 percent of the cost of adding beneficiaries, he said.

The rising cost of administering expanded Medicaid coverage could crowd out other spending "at the cost of education, at the cost of transportation, at the cost of the other needs in our state," Hise said.

North Carolina currently spends about $13 billion a year on the federal-state insurance program, which serves 1.6 million residents. Under the Affordable Care Act, the federal government would pay 100 percent of the expansion cost for the first three years and 90 percent after that.

The 10-year cost to expand in North Carolina is $3.1 billion. The report says states participating in the program will receive $13.41 from the federal government for each dollar they spend.

The North Carolina Hospital Association estimates the state's 109 acute care facilities have laid off at least 2,000 employees as a result of the decision to forgo Medicaid expansion, coupled with other state and federal cuts to the entitlement program. Conversely, expanding Medicaid would create an estimated 20,000 new jobs statewide.

"The uninsured continue to show up at hospitals because they have nowhere else to go," said Hugh Tilson, a spokesman for the state hospital group. "The lack of insurance coverage for a lot of folks is really putting them in a difficult position. And from our perspective, we aren't getting paid for the care we are providing."

North Carolina is one of 24 Republican-led states that refused to expand Medicaid under the federal health care law. North Carolina also refused to set up a state exchange where workers qualifying for federal subsidies could buy private insurance.